Chinese economy slows, GDP growth at 7.4pc

Chinese economic growth has slowed to 7.4 per cent for the year to the end of March, but beat forecasts.

That gross domestic product result is down from 7.7 per cent in the previous figures for the year to December.

However, the result was a little higher than economist forecasts, which centred on 7.3 per cent growth.

That has pushed the Australian dollar slightly higher, from around 93.5 US cents to just over 93.7 US cents immediately after.

The major mining stocks on the Australian share market also got an initial boost, erasing most of their morning losses to be generally trading flat.

However, monthly figures also released today show China's investment in fixed assets (up 17.6 per cent over the year to March) and its industrial output (up 8.8 per cent) were both below average economist expectations.

Westpac's senior international economist Huw McKay says these sectors are more relevant than overall GDP to Australia's commodity exporters.

"The month of March indicates that momentum was no good, and we're moving into a second quarter where Chinese growth is going to be less of a support [to Australia's economy] than we've become used to over recent years," he told ABC News Online.

Mr McKay says, over time, Australian businesses are going to have to adapt to take advantage of the new areas of demand as China's economy rebalances away from export-oriented manufacturing to more domestic consumption.

"Services activity is gaining share at the expense of industry and the other side of that is that consumer activity is gaining ground at the expense of investment," he observed.

"At the moment it is investment on the one hand and industry on the other which are the direct drivers of the Australian resources sector, as time goes by Australia will reorient its economy to match what's happening in our major trading partner and we will be selling more goods and services into the Chinese consumer sector."